Criteria for Identification and Graduation of LDCs
The Committee for Development Policy (CDP), a subsidiary body of the UN Economic and Social Council, is – inter alia – mandated to review the category of LDCs every three years and monitor their progress after graduation from the category.
The identification of LDCs is currently based on three criteria: per capita gross national income (GNI), human assets and economic vulnerability to external shocks. The latter two are measured by two indices of structural impediments, namely the human assets index and the economic vulnerability index (for more details see: LDC Criteria):
- Income criterion, based on a three-year average estimate of GNI per capita for the period 2011-2013, based on the World Bank Atlas method (under $1,035 for inclusion, above $ 1,242 for graduation as applied in the 2015 triennial review).
- Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: the gross secondary school enrolment ratio; and (d) adult literacy rate.
- Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries; (e) share of population in low elevated coastal zones; (f) instability of exports of goods and services; (g) victims of natural disasters; and (h) instability of agricultural production.
In the review process, the Committee determines threshold levels on each of the three criteria to identify the countries to be added to or graduated from the category. The thresholds for graduation are higher than for inclusion. In the identification process, the HAI and EVI thresholds are fixed by the Committee.
To be included in the list of LDCs, a country must satisfy all three criteria. In addition, since the fundamental meaning of the LDC category, i.e. the recognition of structural handicaps, excludes large economies, the population must not exceed 75 million.
To become eligible for graduation, a country must reach threshold levels for graduation for at least two of the aforementioned three criteria, or its GNI per capita must exceed at least twice the threshold level ($2,484 in the 2015 triennial review), and the likelihood that the level of GNI per capita is sustainable must be deemed high.
After a country has become eligible for graduation for the first time, an ex-ante impact assessment and a vulnerability profile are produced and delivered to the Committee as inputs for its deliberations.
To be recommended for graduation, a country must be found eligible at two successive triennial reviews by the CDP.
A country graduates from the LDC category three years after the GA takes note of the ECOSOC endorsement of the recommendation of the CDP. During this three-year period, the country remains on the list of LDCs and continues to benefit from the special support measures associated with LDC status. The smooth transition strategy is to be implemented only after the actual graduation of the country.
2018 Triennial Review
The Committee found Bhutan, São Tomé and Príncipe and Solomon Islands eligible for graduation for the second consecutive time and recommended them for graduation from the list. As decided at the 2015 triennial review, the Committee considered Kiribati again and found it eligible for graduation for the third consecutive time. It recommended the country for graduation and further recommended the creation of a category of countries facing extreme vulnerability to climate change and other environmental shocks. Kiribati, Tuvalu and similarly vulnerable countries within that category should receive support targeting these vulnerabilities. Nepal and Timor-Leste were also found eligible for the second consecutive time, but were not recommended for graduation. The Committee will consider Nepal and Timor-Leste again at the next triennial review, in 2021. At that time, it will also consider Bangladesh, Lao People’s Democratic Republic and Myanmar which were found eligible for graduation for the first time at the 2018 triennial review.
2015 triennial review
At the 2015 triennial review of the list, Angola met the criteria for graduation for the second consecutive time. The Committee recommended Angola for graduation from the LDC category.
The Committee also noted that Kiribati met both the income and HAI criteria for second consecutive time. The Committee did not recommended, however, Kiribati to be graduated from the LDC category due to its extreme high vulnerability and decided to defer consideration on the graduation of Kiribati to its 2018 session. According to the EVI, Kiribati is the most vulnerable country in the world.
Additionally, five countries met the eligibility criteria for graduation for the first time: Bhutan, Sao Tome and Principe, Solomon Islands, Timor-Leste and Nepal. According to present rules, if these countries meet the criteria for graduation during the 2018 triennial review, the may be recommended for graduation by the Committee.
The Committee noted the high vulnerability, as illustrated by the country’s EVI, of Tuvalu, which was recommended by the committee for graduation at its 2012 triennial review, and requested to the international community to provide Tuvalu with adequate technical assistance and concessional financing to address the climate change challenge. ECOSOC has decided to defer the consideration of the graduation of Tuvalu to its session of 2018 to allow the Council “to have an opportunity for further consideration of the particular challenges that Tuvalu faces” (See E/2015/L.13)
Equatorial Guinea graduated from the category the LDC category on 4 June 2017, following a transition period of three and a half years after the adoption by the United Nations General Assembly of resolution A/RES/68/18 of 4 December 2013, which took note of the decision of the Economic and Social Council E/RES/2012/32 to endorse the recommendation of the Committee for Development Policy on this matter.
Vanuatu, which has been found eligible for graduation in 2006, 2009 and 2012, was recommended for graduation in the 2012 triennial review. The General-Assembly decided to grant an additional preparatory period of one year before the start of the three-year preparatory process and invited the country to prepare its national smooth-transition strategy, with the support of the United Nations system and in cooperation with its bilateral and multilateral development and trading partners. (See resolution A/RES/68/18)
For further information on the 2015 triennial review, see the 2015 CDP Report.
The four countries to have graduated out of the LDC category up to 2015 are Botswana, Cape Verde, Maldives and Samoa. The next triennial review will be undertaken by the CDP in 2018.